The first quarter of 2024 marked a significant turnaround for many intelligent Internet of Things (IoT) chip manufacturersAs artificial intelligence (AI) technology continues to advance and find its footing in various industries, System on Chip (SoC) architectures have emerged as crucial components in smart devicesThese chips serve as the 'brains' of smart terminals, enhancing interactions and improving operational efficiency, thus steering the industry towards a more intelligent IoT eraThis progressive transformation in smart IoT devices not only rejuvenates the downstream application sector but also cycles back to fuel growth within the upstream chip manufacturing landscape.

Artificial Intelligence of Things (AIoT) represents the intersection of artificial intelligence and the robust universe of networking devices

In the latter half of 2023, the sector began to see a resurgence in performance, bolstered by the development and commercialization of high-performance SoC chips, WiFi chipsets, and high-definition video decoding hardwareConsequently, many AIoT chip companies have reported recovery in their financial performance, with some publicly traded firms nearing record revenue levels as of early 2024.

Generative AI systems, personified by innovations like ChatGPT, are revolutionizing interactions within smart homesFuture applications are expected to permeate various smart home products such as intelligent speakers and wearable devices, enhancing not only the richness and accuracy of product feedback but also profound enhancements in understanding user intentThis translates into an improved consumer experience and carved pathways for explosive growth in smart home technology

• Rising Investment Sentiment in Memory Chips
• Impact of Early Rate Cuts by the ECB
• China's Storage, Photonics Tech Sees Major Advance
• Federal Reserve Cuts Rates by 25 Basis Points!
• Silicon Carbide Prices Plummet by Nearly 30%

The AI SoC, as a vessel for edge computing power, is poised to experience rapid growth in conjunction with the rising intelligence in IoT devices, with projections indicating that the market for AIoT SoC chips in China will reach approximately 279.4 billion yuan by 2027.

The road to profitability has been marred with challengesThe consumer electronics sector faced a slump in 2022, impacting the profitability of related chip products and leading the industry into a downward cycleThroughout this period, chip design companies remained committed to high levels of research and development investment, focusing on the creation of next-gen chipsAIoT SoCs are integrated chips developed as primary controllers for AIoT devices, acting as the fulcrum for data computation and processingThey combine modules ranging from CPUs and GPUs to neural network processors and audio/video codecs, providing the versatility needed to support various functions including AI operations and audio-video processing.

With inventory levels eventually stabilizing and the commercial launch of high-performance chips, the second half of 2023 marked a rebound in AIoT SoC sales

For instance, Espressif Systems reported a 12.7% revenue growth year-on-year in 2023, alongside a striking 63.6% rise in net profit attributable to shareholdersThey successfully shipped over a billion IoT chips globally, expanding their product range beyond Wi-Fi microcontroller units into the broader AIoT SoC domainSimilarly, Hengxuan Technology saw revenue climb by 46.6%, with a comparable increase in net profit of 136%. Allwinner Technology also enjoyed a 12.4% revenue growth attributed to their smart terminal application processors.

The trend towards localized and miniaturized deployment of large-scale AI models at the edge has become increasingly evident; for example, Rockchip experienced remarkable increases in revenue—around 64% to 67%—year-on-year in Q1 of 2024, thanks to their advancements in automotive electronics and machine vision

Their net profits surged significantly, contrasting starkly against the losses faced in earlier yearsMeanwhile, Amlogic achieved revenues of 1.38 billion yuan, representing a 33.1% year-on-year increase, falling just short of their highest recorded income in 2022.

SoC architectures are distinguished by high integration, low power consumption, minimal heat generation, and exceptional compatibility, allowing them to perform multi-format processing in video encoding and visual tasksIn the context of end-user products, the market for SoCs catering to TWS earbuds, smartwatches, and VR/AR wearables features a multitude of smaller clients, which contrast sharply with the large fits typically targeted by major players in the semiconductor industry, like smartphones or PCsThis shift towards power-efficient designs enhances the long-lasting appeal, creating fertile ground for domestic manufacturers to flourish

Research organizations project that the Chinese market for AIoT SoC chips will continually expand, anticipated to reach 279.4 billion yuan by 2027.

In the realm of video technology, the emergence of smart boxes capable of supporting 8K decoding has begun to gain traction, with related industry standards set to be enforced starting November 2023. As demand for ultra-high-definition displays rises—driven by sectors such as healthcare, surveillance, visual industrial applications, and smart transportation—the technological gaps in 8K standards and associated chip solutions continue to close, pushing the industry chain towards maturity.

Wi-Fi remains a cornerstone technology for the advancement of smart cities and connected homesTraditionally centered around the 2.4GHz and 5GHz frequency bands, the evolving landscape now emphasizes ultra-high throughput and low-latency applications

The growth of IoT applications across smart homes, smart cities, and industrial internet demands that Wi-Fi technologies evolve rapidly—improving speed, reducing latency, and enhancing data transmission quality.

To contextualize, major domestic players like Baidu, Xiaomi, and Alibaba have long been establishing user-friendly ecosystems around their smart speakersDespite a peak in sales in 2020—hitting 37.85 million units—this figure saw a plummeting 28% drop by 2022. Yi Jiayi reports that a revival initiated through generative AI applications in these smart speakers stands to reinvigorate the market, projecting steady annual sales of around 20 million units from 2024 onward.

With giants like Baidu and Xiaomi closely collaborating with generative AI models—like GPT-4—the capability to interact using voice and video is set to markedly enhance the user experience

This entails a future where smart speakers integrate advanced scene-based assistive capabilities, capitalizing on the burgeoning ecosystem fostered by AI core integration, offering seamless intelligence across connected devices.

As AI technologies penetrate deeper into smart television landscapes, chips within these devices require bolstering in terms of CPU computing power, exclusive AI kernels, and DSP capabilities, not to mention a rich expansion of audio and video interfacesFurthermore, fostering an environment responsive to atmospheric changes, illumination levels, and user behaviors will transform these platforms into proactive entities, foreseeing and addressing consumer needs through a well-integrated AI framework.

The rise of edge AI technology, coupled with the trend of open hardware through RISC-V, nurtures innovation within the chip design sphere, crafting a fertile space for entrepreneurs to flourish

The HarmonyOS—characterized by its cross-device and distributed nature—facilitates seamless connectivity among various devices, permitting them to work in harmony without cloud dependency, leading to proficient handling of computationally intensive tasks at the edge.

In conclusion, the convergence of cloud computing and IoT has indeed etched a clear path ahead for AI integration across diverse devices, with AI SoC serving as the foundation for forthcoming wave of intelligent devicesThe edge AI market, once shrunk to less than $40 billion in 2022, is projected to cross the $60 billion threshold by 2025, with a compounded annual growth rate of 30% in ChinaAs the proliferation of IoT devices continues and AI becomes ubiquitous across industries, the demand for AIoT chips will accelerate, shaping a future defined by innovation and connectivity.